from South Florida Business Journal - By Paul Brinkman
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A local developer has sued KeyBank in Broward County Circuit Court over lending problems at the recently completed Il Lugano condo hotel in Fort Lauderdale.
Arnstein & Lehr attorney Alan Kipnis is defending the bank in the case, filed by developer South Florida Beach Properties, which is led by Canadian Neil Arnovitz and Robert Couf, of Fort Lauderdale.
South Florida Beach Properties started construction in 2004 on the $65 million project, on the Intracoastal Waterway just north of Oakland Park Boulevard. It was originally announced as a Hilton, but lost that flag early.
The 14-story building was finished last year by another developer. Couf and his company allege KeyBank pulled the plug on $38 million in funding in 2006 in violation of contract agreements.
Connecticut-based Sagecrest LLC, the mezzanine lender, foreclosed and handed the operation to a local affiliate, Sagecrest Vegas, after the developer defaulted.
Kipnis filed a motion to dismiss the suit on Aug. 20. In it, he states that South Florida Beach Properties has no standing for its claims.
“KeyBank merely made a construction loan to Il Lugano, and nothing more,” the motion stated. “While there are circumstances under which a fiduciary duty can arise between a bank and its borrower, no such circumstances have been specifically plead in this case.”
Couf and South Florida Beach Properties lost $2.87 million in capital contributions to the project upon foreclosure, according to the suit. They are represented by attorney Glenn Waldman, of Waldman Feluren Hildebrandt & Trigoboff in Weston.
Couf and the lawsuit allege KeyBank concocted unreasonable hurdles for him, such as offering to let buyers out of their contracts. However, Kipnis said KeyBank cut off funding because the developer activated its mezzanine loan before meeting required presales levels.
The KeyBank suit is one of several lender liability cases filed in South Florida recently. For more information on lender liability suits, see the Aug. 22 print edition of the South Florida Business Journal.”
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